Commercial Property Rent Arrears Suspension Lifted

MEASURES to prevent commercial property landlords from taking eviction action for rent arrears were introduced by the UK Government in June 2020.

These regulations included:

  • Suspension until 30 September 2020 of landlord right to re-enter the commercial property and terminate the lease for rent arrears;
  • Suspension of Commercial Rent Arrears Recovery, unless rent arrears remain unpaid for 189 days;
  • Voluntary code of practice for landlord and tenants to resolve rent arrears and other issues.

These measures allowed commercial property tenants to breathe a sigh of relief. However, rent still needs to be paid to the landlord. Businesses are now slowly starting to re-open across the Oldham borough and while the UK Government has been gradually easing the lockdown across the country, Oldham has experienced some setbacks for social meetings, (as Business Edge went to press).

So what steps can a commercial property landlord take to recover rent arrears?

Currently, the following actions are still available to landlords:

1. A claim in the County Court against the tenant;

2. A claim in the County Court against the tenant’s guarantor (where appropriate);

3. Charge interest on the rent arrears (dependent on the terms of the lease);

4. Draw down of the rent deposit (dependent on the terms of the rent deposit deed).

Usman Anwar, a solicitor specialising in Property Litigation at Pearson Solicitors and Financial Advisers has this advice for local businesses: “The UK government acted quickly to introduce measures to support businesses, including the Coronavirus Job Retention Scheme, deferral of VAT payments and loans to support and assist businesses.

“All these measures should help facilitate income for businesses and allow tenants to pay rent.

“It may be the UK Government extends the suspension for commercial property rent arrears for a further period. Here at Pearson Solicitors we are happy to assist commercial property landlords and tenants to resolve disputes or to just give some general advice.

“For struggling landlords and Business Edge businesses we will consider providing legal advice on a deferred payment scheme, depending on the terms of the lease.”

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